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On Saturday, U.S. President Donald Trump threatened Riyadh with "severe punishment" if Khashoggi has been murdered.

A Saudi official source quoted by SPA news agency said it was "a positive move" Turkey had agreed to the creation of what it described as a "joint action team" over Khashoggi's disappearance.

Khashoggi, who moved to the U.S. in 2017 and worked as a columnist for The Washington Post, disappeared in Turkey on October 2 when he reportedly entered the building of Saudi Arabia's Consulate in the city of Istanbul.

DIplomatic sources told the United Kingdom broadcaster on Sunday that both the US Treasury Secretary, Steve Mnuchin, and the UK's International Trade Secretary, Liam Fox, might not attend the Future Investment Initiative (FII), often referred to as 'Davos in the Desert, ' following reports of Khashoggi's murder after entering the Saudi consulate in Istanbul on 2 October.

Turkish officials say they fear a team of Saudi agents killed and dismembered Khashoggi, and they have released surveillance footage of the alleged perpetrators and mysterious movements outside the consulate on October 2, the day he entered.

US President Donald Trump called Khashoggi's suspected killing "a bad thing", but stopped short of assigning blame.

Media captionCCTV footage shows missing Saudi journalist Jamal Khashoggi entering the Saudi consulate in Istanbul.

There was already mounting concern over civilian deaths caused by a Saudi-led military coalition in Yemen's civil war and some have said Washington should block military sales to Riyadh if the allegations over Mr Khashoggi are proven.

From tech tycoons to media giants, a host of Western companies are now distancing themselves from the Gulf state, imperilling Crown Prince Mohammed bin Salman's much-hyped economic reform drive.

"Something this big would definitely spook investors, and Saudi just opened up for foreign direct investment, so that was big", said Issam Kassabieh, a financial analyst at Dubai-based firm Menacorp Finance.

Saudi Arabia has been under pressure since the disappearance with countries such as France, the U.S., and Turkey demanding answers from the kingdom. Russian Federation wanted it, China wanted it, we wanted it.

The intrigue surrounding Khashoggi's disappearance has only deepened since he was last seen entering the Saudi consulate in the Turkish capital of Istanbul 10 days ago.

Accounts say Khashoggi turned on the sound recording capability on his device as he entered the Saudi consulate in Istanbul on October 2.

The Saudis have called accusations that they are responsible for Khashoggi's disappearance "baseless".

"I actually think we'd be punishing ourselves if we did that", Trump said, according to Reuters. "His voice and his ideas will reverberate, from Turkey to Saudi Arabia, and across the world". There is also evidence of the moment that Khashoggi was killed, the source said.

In just two sessions the Saudi bourse, the largest in the Arab world, has shed nearly $50 billion of its capitalisation, which now stands at around $450 billion.